Deputies from President Viktor Yanukovich's Party of the Regions and their allies, who hold the majority in parliament, rushed through the draft law's first reading on 18 September. It would have allowed prison terms of up to five years for offenders.
However, last week Yanukovich criticised the timing of the proposal on the sidelines of the UN General Assembly, prompting the Regions deputy who introduced the law to remove it from parliamentary discussion.
Yanukovich spoke against it after protests by Ukrainian journalists and also after the opposition turned it into an election issue.
The parliament voted to remove the bill from its agenda, although the opposition voiced concerns that it may resurface later.
"They will do everything to come back to this after the election of a new parliament," said Arseny Yatseniuk, the leader of the United Opposition bloc that includes the Batkivshchyna (Fatherland) party of imprisoned former prime minister Yulia Tymoshenko.
The scrapped libel law would have applied to anyone, including journalists, who spread "deliberately untrustworthy information" which denigrated a person, hurt their honor and dignity or undermined their business reputation.
Lawmakers vote to outlaw ‘promotion of homosexuality’
At the same session, lawmakers adopted on first reading a draft law to make the promotion of homosexuality a criminal offence.
The draft law, which needs to be confirmed at a second reading, does not clearly define what it means by the "promotion of homosexuality" but says it is a threat to national security.
If the law is enacted - something that would also require Yanukovich's signature - Ukraine's criminal code would be amended to punish anyone convicted of importing, producing or spreading "works that promote homosexuality" with prison terms of up to five years.
Homosexuality itself has been legal in Ukraine since the fall of the Soviet Union, of which it was part, in 1991.
But a 2011 poll conducted by the Gorshenin Institute, a local think tank, showed that 78% of Ukrainians viewed homosexuality negatively, making a law against its promotion a potentially useful tool in the election campaign.